Update re Indigenisation (8297F)
21 June 2012 - 4:00PM
UK Regulatory
TIDMCMCL
RNS Number : 8297F
Caledonia Mining Corporation
21 June 2012
Zimbabwe Indigenisation update: Caledonia Concludes Sale
Agreement with National Indigenisation and Economic Empowerment
Fund and
Receives Indigenisation Compliance Certificate
Toronto, Ontario June 21, 2012: Caledonia Mining Corporation
("Caledonia" or the "Company") (TSX: CAL, OTCQX: CALVF, AIM: CMCL)
is pleased to announce the signing of an agreement with the
National Indigenisation and Economic Empowerment Fund ("NIEEF") to
transfer 16% of the Blanket Mine in Zimbabwe ("Blanket") and the
receipt of the Certificate of Compliance with requirements of
Section 31(1)(a) of the Zimbabwe Indigenisation Act.
A conditional agreement has been signed for the sale of 16% of
Blanket for a consideration of US$11.742 million to NIEEF. This
agreement is in accordance with the Memorandum of Understanding
("MoU"), which was signed with the Government of Zimbabwe on
February 20, 2012 pursuant to which Indigenous Zimbabweans will
acquire 51% ownership of the Blanket Mine for a paid transactional
value of US$30.09 million.
This agreement is in addition to the following conditional
agreements which have already been signed in accordance with the
terms of the MoU and as disclosed in previous news releases:
-- an agreement for the sale of 15% of Blanket to a consortium
of Indigenous Zimbabweans for a consideration of US$11.008
million;
-- an agreement for the sale of 10% of Blanket to The Blanket
Mine Employee Trust that has been established for the benefit of
the present and future managers and employees of Blanket for a
consideration of US$7.339 million; and
-- an agreement for the donation of 10% of Blanket to the Gwanda
Community Share Ownership Trust that has been established for the
benefit of the local community. Pursuant to the terms of the MoU,
Blanket will also make a non-refundable donation of US$1.0 million
to this trust.
Caledonia will facilitate the vendor funding of the sale
transactions which will be repaid from future Blanket dividends
attributable to the Indigenous Zimbabwean shareholders. Outstanding
balances on these facilitation loans will attract interest at a
rate of 10% over the 12-month LIBOR. The timing for the repayment
of the facilitation loans will depend on the future financial
performance of Blanket. Caledonia expects to redeploy the proceeds
received in its projects.
Completion of these agreements is subject to several conditions
precedent, which include certain approvals from the Reserve Bank of
Zimbabwe which are expected to be met in the near future.
Blanket's unaudited revenues and profit after tax for the year
to December 31, 2011 were US$56.6 million and US$19.2 million
respectively.
For more information, please contact:
Caledonia Mining Corporation Canaccord Genuity Limited
Mark Learmonth John Prior / Sebastian Jones
Tel: + 27 11 447 2499 Tel: + 44 20 7523 8350
marklearmonth@caledoniamining.com
Newgate Threadneedle CHF Investor Relations
Beth Harris / Josh Royston Stephanie Fitzgerald
Tel: +44 20 7653 9850 Tel : +1 416 868 1079 x 222
stephanie@chfir.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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